Consumer Sovereignty,Prices and Preferences for Higher-order Goods

Abstract

This paper considers two arguments for markets: prices, within them, allow us to coordinate our activities in situations of dispersed knowledge and ignorance, and markets foster consumer sovereignty. It suggests that these – telling – arguments stand in need of qualification, in the light of consumers' preferences for ‘higher-order’ goods, which may be difficult to exhibit through choices in the market-place. It suggests that such preferences are not easily handled by political means, either – and that we may here face an uneliminable imperfection in our social arrangements. It may be important that we be aware of such imperfections, lest we be tempted away from the best arrangements we can achieve by those who point to such imperfections and promise to offer us a resolution of them.

Nobody is exempt from the law of the market, the consumers' sovereignty.¹